New Delhi: India’s Industrial production growth came down to a 5-month low of 1.1% in March 2023, showing a sharp decline in comparison to 5.8% in February 2023, as a result of poor performance of power and manufacturing sectors, showed government data on Friday.

Economists have expressed their concerns over the slow pace of manufacturing growth, saying that domestic consumption demand moving forward would be critical when external demand is possible to remain weak. Previously, the recorded lowest growth was in October at 4.1%.

According to the data of the Index of Industrial Production (IIP) released by the National Statistical Office (NSO), the manufacturing sector’s output rose by 0.5 per cent in March 2023 compared to 1.4 per cent a year back.

The factory output growth considering the Index of Industrial Production (IIP) which stood at 2.2 per cent in March 2022.

What do industry experts have to say?

Madan Sabnavis, the chief economist of Bank of Baroda, drew attention to the contradictory results of factory output in March showed between the S&P Global Purchasing Managers’ Index (PMI) and Index of Industrial Production (IIP).

Stating on the matter that IIP numbers do not go well with the PMIs announced and hence PMI should be taken “with caution”.

The time when PMI survey showed that factory output was at a three-month high, on the other hand, Manufacturing growth, as per IIP, was the lowest in 5 months.

“Export-intensive sectors such as textiles, wearing apparel, leather & related products continue to remain under pressure,” said Rajani Sinha, chief economist.

“The poor performance of the consumer goods segment is concerning as consumer durables, as well as non-durables, have contracted in March. Pick-up in investment demand will also be contingent on continued revival in domestic consumption demand”, said CareEdge.